IFA & California Franchisees Issue Statement on Deal To Protect Restaurants
By: International Franchise Association
The IFA released the following statement on passage of AB 1228 by the California State Legislature, after it was amended following the announcement of a legislative agreement brokered by California Governor Gavin Newsom, the Save Local Restaurants coalition, and the Service Employees International Union (SEIU).
The agreement will protect California restaurants from the harms of AB 257 (FAST Act), joint liability on quick-service restaurants imposed by the original version of AB 1228, and regulatory overreach by the Industrial Welfare Commission.
“This agreement creates the best possible outcome for workers, local restaurant owners, and brands, while protecting the franchise business model in California,” said IFA President and CEO Matt Haller. “Franchising is responsible for creating opportunities for thousands of people to become small-business owners, and this agreement eliminates the existential threats our members faced. We thank Governor Newsom for helping the parties come together and urge him to sign AB 1228.”
The IFA has been at the forefront of the fight against AB 257, spearheading the Save Local Restaurants coalition following its passage to take the measure to voters through a referendum on the 2024 ballot. The bill would have created an unelected wage and labor council with lawmaking authority for California’s QSR industry, raising prices by an estimated 20% at affected restaurants, and forcing some restaurant owners to close their doors.
Following qualification for the referendum, lawmakers introduced AB 1228 in the 2023 legislative session, which, in its original form, would have imposed joint employment on franchised quick-service restaurants, a provision originally amended out of AB 257 because of its extreme nature.
